Gov. Arnold Schwarzenegger is set to sign a new law aimed at banning Golden State public pension funds - which includes the two largest ones in America - from investing in companies that are involved in developing Iranian petroleum or natural-gas resources. Florida's public-employee-retirement fund is divesting nearly $1.3 billion invested with 21 companies doing business in Iran or Sudan.

Already, falling oil production (down by a third since the 1979 revolution) and rising domestic demand will cut government energy revenues by an estimated 20 percent over the coming year.

The Iranian regime is increasingly unpopular, with stories circulating of clerics afraid to go out in public in their religious attire for fear of being attacked. Financial pressure on the government can be the key element in forcing a change of course.

Gasoline

may no longer sell for 35 cents a gallon in Tehran if the government runs into financial difficulty.